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Statement of Denise Swink
Acting Director
Office of Energy Assurance
U.S. Department of Energy

Subcommittee on Infrastructure and Border Security
Select Committee on Homeland Security

September 17, 2003

My name is Denise Swink. I am Acting Director and Deputy Director of the Office of Energy Assurance in the U.S. Department of Energy, a position I have held since March of this year. The Office of Energy Assurance is responsible for leading the Department of Energy’s effort to ensure a secure and reliable flow of energy to America’s homes, businesses, industries, and critical infrastructures. Energy assurance addresses a variety of potential threats including natural disasters, accidents, terrorism, aging assets, system reliability, and cascading failures involving related infrastructures. DOE’s Office of Energy Assurance addresses these threats using several strategies: protection of energy systems, detecting problems quickly, mitigating the impact of a failure or attack, and recovering rapidly from damage. We work in close collaboration with the Department of Homeland Security (DHS) and in partnership with the energy industry, state and local governments, and other federal agencies. Because of the importance of energy assurance, my Office reports directly to the Deputy Secretary of Energy.

The Office fulfills key federal responsibilities for energy assurance that date back to the origins of the Department of Energy. Selected legislative authorities include the Department of Energy Organization Act, the Federal Energy Administration Act of 1974, the Federal Power Act, the Public Utility Regulatory Policies Act of 1978, and the Robert T. Stafford Disaster Relief and Emergency Assistance Act. Many of these authorities address the powers and responsibilities of the Secretary of Energy during energy emergencies but some cover the broad responsibilities of the Secretary in ensuring that consumers have available an adequate and reliable supply of energy. The Office also fulfills federal responsibilities for securing and improving the energy infrastructure that are outlined in the President’s National Strategy for Homeland Security and the President’s National Energy Policy.

The Office of Energy Assurance focuses on six priority areas that address these responsibilities and respond to the findings of leading studies of the reliability of the energy infrastructure conducted over the past seven years and vulnerability assessments conducted after September 11, 2001. The six focus areas are: 1) Energy Emergency Support and Management, 2) State and Local Government Support, 3) Criticality of Energy Assets, 4) Enabling Partnerships, 5) Technology Development and Application, and 6) Policy and Analysis Support. These are all critical elements of developing a balanced approach to our immediate energy protection needs and our longer term energy assurance needs.

The Nation’s energy infrastructure is vast, complex, and highly interconnected. It encompasses a multitude of power plants, electric transmission and distribution lines, oil and gas production sites, pipelines, storage facilities, port facilities, information and control systems, and other assets that are integrated into our national energy system. This energy infrastructure is also the backbone for other critical infrastructures such as telecommunications, transportation, and banking and finance. In addition, there are a large number of entities that own, operate, finance, supply, control, build, regulate, monitor, and oversee our energy infrastructure. Eighty-five percent of the Nation’s infrastructure is owned by the private sector. Regulation and oversight of energy production, generation, transportation, transmission, and use is governed by a host of federal agencies and states. As a result, a successful program in energy assurance must involve a collaborative approach that includes public-private partnerships to coordinate the various players and activities.

Coordination and collaboration are central principles of our approach to energy assurance. President Bush stated that homeland security is a shared responsibility that requires a national strategy and compatible, mutually supporting state, local and private sector strategies. This approach was embodied in the National Strategy for Homeland Security. The Department of Energy has lead federal responsibility for working with the energy sector in protecting critical infrastructures and key assets, in collaboration with the Department of Homeland Security. Two additional strategies, the National Strategy for the Physical Protection of Critical Infrastructures and Key Assets, and the National Strategy to Secure Cyberspace, expound on this responsibility and direct the Department of Energy to develop and maintain collaborative relationships with state and local governments and energy industry participants.

We work closely with the Department of Homeland Security, which leads, integrates, and coordinates critical infrastructure protection activities across the federal government. To aid this effort, DOE and DHS are in the process of developing a Memorandum of Agreement between the two agencies that will outline specific areas of collaboration and responsibilities. This encompasses critical infrastructure protection of physical and cyber assets, science and technology, and emergency response. We are also beginning to work with key parts of DHS, such as the Coast Guard and the Federal Emergency Management Agency (FEMA), to determine how best to coordinate our efforts. For example, in July we attended a meeting which included representatives of DOE, DHS, the Defense Intelligence Agency, and the National Institute of Standards and Technology to consider options for developing a collaborative National SCADA Program. This program would help improve the physical and cyber security of supervisory control and data acquisition (SCADA) systems, which are used in the energy sector to remotely control and manage the flow of electric power and fuels throughout the energy infrastructure.

We also work with other federal agencies that have energy-related responsibilities. We work closely with the Department of Transportation’s Office of Pipeline Safety to coordinate our respective efforts and identify areas for collaboration. We also coordinate with the Environmental Protection Agency (EPA) to avoid redundant efforts with petrochemical facilities. During the recent blackout, we assisted EPA in their review of Michigan’s fuel waiver, which was ultimately granted. The waiver allowed the sale of 9 RVP gasoline in lieu of 7.8 RVP gasoline, which created more available resources for the State of Michigan and thereby prevented a possible gasoline shortage. We also partnered with several federal agencies (including the Federal Energy Regulatory Commission (FERC)), state regulators, and industry to assess the implications of a loss of natural gas supply to certain regions of the country. This study will help government policymakers and the natural gas industry to reduce the industry’s vulnerability to terrorism, operational disruptions, and natural disasters.

Within the Department of Energy, we coordinate across a variety of offices:

* DOE’s new Office of Electric Transmission and Distribution on issues related to the electric grid, most notably the recent blackout, which I will expand upon later;
* The Office of Security to improve the operations of DOE’s Emergency Operation Center.
* The Chief Information Officer on the development of a joint facility to support continuity of operations;
* The Office of Energy Efficiency and Renewable Energy’s regional offices to support our meetings with state energy offices;
* The Office of Fossil Energy on new technologies to harden oil and gas pipelines;
* The Office of Science on visualization techniques through their Advanced Scientific Computing Research Program; and
* The Office of Independent Oversight and Performance Assurance on cyber security protection.

Collaboration with the private sector is critical to improving energy assurance. As part of the President’s strategy, we have designated “sector liaisons” to work with the electricity and oil and gas sectors. These liaisons in turn employ “sector coordinators” who function as DOE’s primary interfaces on energy infrastructure security issues. DOE’s sector liaisons share information and discuss coordination mechanisms with the American Petroleum Institute (API), the American Gas Association (AGA), the Interstate Natural Gas Association of America (INGAA), the Gas Technology Institute (GTI), the National Propane Gas Association (NPRA), the Edison Electric Institute (EEI), the Electric Power Research Institute (EPRI), the National Rural Electric Cooperative Association (NRECA), the American Public Power Association (APPA), and the North American Electric Reliability Council (NERC). For example, we are participating in NERC’s Critical Infrastructure Protection Advisory Group and have briefed them on our activities related to electric reliability and cyber protection. We have had similar discussions on our oil and gas activities with API, which serves as the sector coordinator for oil and gas. To help create a strong business case for security investment, we are also collaborating on potential studies with the Council on Competitiveness.

States and local governments are also essential parts of energy assurance. They are responsible for emergency planning and response, and are the organizations that citizens turn to in times of crisis. We support a variety of state efforts to plan for, respond to, and mitigate actions that adversely affect the energy infrastructure and disrupt energy supplies. In the short time our program has been in existence, we have held several meetings with the National Association of State Energy Officials (NASEO), the National Governors Association (NGA), the National Association of Regulatory Utility Commissioners (NARUC), and the National Conference of State Legislatures (NCSL) to better understand how we can assist the states with emergency planning, emergency response tools, training and education, and elevating public awareness. We funded an NCSL study of energy security guidelines and options for state legislatures which was published in April 2003. We have additional efforts underway to develop model state guidelines for energy assurance plans and improved systems and procedures for multi-state coordination.

There are several other types of coordination underway which deserve mention. First and foremost, we tap the excellent scientific and technical resources of our national laboratories to address energy assurance issues. DOE has already identified over 500 ongoing activities in the national laboratories related to the protection of our Nation’s critical infrastructures. We have also initiated a Laboratory Coordinating Council, representing all our major laboratories, to coordinate capabilities and activities related to infrastructure protection that can help meet our energy assurance challenges. We are also working with several universities on physical and cyber security issues. As part of our technology assessment efforts, we engaged Carnegie Mellon University to characterize needs related to vulnerabilities in the electricity sector. We are also exploring opportunities with George Mason University’s Critical Infrastructure Protection Project. Our program is utilizing the greatest repository of physical structure engineering expertise — the International Union of Operating Engineers (IUOE). DOE and IUOE have begun development of energy assurance training curricula for energy infrastructure stakeholder groups, with initial courses offered by the International Union of Operating Engineers.

As the recent blackout demonstrated, our energy systems are interconnected with our North American neighbors. We cannot ignore the importance of coordinating energy assurance across our borders. Canada’s electric grid is interconnected with the U.S. grid across our northern border and nearly all of Canada is an integral part of three of the ten NERC regions. As you know, we are currently working with Canada on the Task Force to investigate the cause of the blackout, which I will discuss in a moment. Although there are fewer electricity interconnections with Mexico, there are two small portions of Mexico that are also part of NERC regions. However, the United States also has bilateral agreements with Mexico under the Mexico-United States Critical Infrastructure Protection (CIP) Framework for Cooperation and the Smart Borders Initiative. In these, we agree to develop mechanisms for exchanging information on threats, sabotage and terrorist actions and provide coordination and cooperation in actions and measures to address detected vulnerabilities

The present concern of this Committee is how coordination works when a critical infrastructure fails, such as in the August 2003 blackout. I mention all these coordination efforts because I believe they provide the foundation for an effective national response for energy assurance.

Our process for helping others prepare for emergencies includes several elements. First, each electric energy provider is required to file an Emergency Incident and Disturbance Report when a system disruption occurs that meets certain criteria. An initial report must be filed within one hour and a final report within 48 hours. This allows DOE to be aware of potential major electric energy problems. Second, we provide active support for two Information Sharing and Analysis Centers (ISACs): the Energy ISAC (for oil and gas) and the Electricity Sector ISAC (for electricity). These ISACs provide a mechanism by which the industry can share important information about vulnerabilities, threats, intrusions, and anomalies among energy companies and provides a mechanism to communicate with the government. The energy ISACs also coordinates with other ISACs. For example, during the blackout the Electricity Sector ISAC was in communication with the Telecom ISAC to monitor how electric problems might affect telecommunications. Our Office is coordinating with the energy ISACs and providing some financial support for their operation. Third, DOE participates in the Federal Response Plan through Emergency Support Function #12, Energy Annex. In the Plan, which is prepared by DHS/FEMA, DOE is the lead organization to gather, assess, and share information on energy system damage and impacts during an emergency.

Let me now review the events that took place immediately after the blackout occurred and explain how we coordinated within the Department, with other federal agencies, with the energy sector, and state and local governments.

On August 14, the Department’s Emergency Operations Center (EOC) was activated with all relevant staff gathering there. Assignments were made regarding monitoring, analysis and mitigation of impacts of the event. Schedules were developed for convening status briefings. Federal Energy Regulatory Commission, Nuclear Regulatory Commission and Department of Homeland Security had a continual presence with their staff, too. DOE had representatives at the DHS Watch Office and FEMA Control Center, too.

The security of DOE’s facilities was assessed, and it was determined that only the Brookhaven National Laboratory in New York was affected. For that facility, backup emergency power was available and increased security police personnel were called up and deployed. DOE’s security activities were coordinated with the FBI, the National Joint Terrorist Task Force, and DHS.

With respect to monitoring of the event unfolding, an open phone line was connected to NERC. Market impact assessments were made continually. Determinations were made on availability of diesel fuel for backup generators. Availability of additional backup generators was researched, and commitments for delivery if needed were obtained. Pipeline outages were assessed to determine if remedial actions were required. Production availability of refineries was determined, as were associated cascading impacts of disruptions. These monitoring and assessment activities led to DOE intervening to encourage more direct support by electric utilities for bringing petroleum refineries in Ohio back into production, and ultimately coordinating drive hour extension and fuel waivers for Michigan.

On August 14, 2003, and only hours after the blackout occurred, the Secretary issued an order pursuant to his authority under section 202(c) of the Federal Power Act, directing the New England and New York Independent System Operators to energize and operate the Cross-Sound Cable. The Secretary issued the order because he determined that an emergency existed and that issuance of the order would alleviate the emergency and serve the public interest. Before issuing the order, the Secretary had received the unanimous recommendation of the North American Electric Reliability Council, the New York Independent System Operator (NYISO), ISO New England, Inc. (NEISO), and electric utilities in both New York and Connecticut supporting issuance of an emergency order.

The Cable was energized a short time after his order was issued. Within hours, it was delivering 300 MW of energy from Connecticut to Long Island and also providing valuable voltage support and stabilization services for the electric transmission systems in both New England and New York. It has been reported that operation of the Cable prevented rolling blackouts from occurring in New York in the hours immediately after electric service was restored.

On August 28, the Secretary issued another order that extended indefinitely the period that the Cross-Sound Cable could be operated. The August 28 order also directs Cross-Sound to continue providing voltage support and stabilization services, which benefit the transmission systems of both New York and New England. The August 28 order stated that “it has not yet been authoritatively determined what happened on August 14 to cause the transmission system to fail resulting in the power outage, or why the system was not able to stop the spread of the outage.” Because these questions have not yet been answered, the appropriate responses obviously have not yet been identified or taken. Therefore, the Secretary determined that an emergency continues to exist and operation of the cable should continue to be authorized.

With respect to State coordination, affected State Governors were contacted and an open communication process was established. Direct communications were established with State Energy Offices.

Letters to Members of Congress were written with the most current status information, and staff within the Office of Congressional and Intergovernmental Affairs were made available for inquiries from 8 AM to 8 PM each day. DOE staff was available for visits to Members’ offices on request.

As part of the Department of Energy’s response to the blackout of August 14, there were a number of public communications items. The Department issued a statement on August 14, coordinated by Deputy Secretary Kyle McSlarrow, noting that DOE had initiated its protocol for contingency situations. The statement noted that DOE was working with appropriate agencies including FERC, the Nuclear Regulatory Commission (NRC), FEMA, and DHS, as well as entities such as the North American Electric Reliability Council to assess the situation.

The Department immediately updated its website by adding a special section on its homepage with information related to the blackout. For example, all statements released from the Department were highlighted, as was general information on transmission grids and frequently asked questions on electricity. Reporters and the public often found answers to their questions. More than one reporter who called DOE’s Office of Public Affairs noted the usefulness of the website information.

DOE’s Office of Public Affairs answered hundreds of media calls and interview requests on August 14 and in the days following. An impromptu “blackout” media e-mail list was created for quick access to these reporters. In addition, the Secretary of Energy conducted multiple TV interviews from August 15 to 18 to communicate with the public on progress being made to resolve the blackout.

As power began to be restored, the Secretary of Energy issued a statement urging citizens of the areas affected by the blackout to use caution in energy use while the system was coming back on line. DOE worked with state and local officials on getting the message out that appliance use should be cut back until systems stabilized.

Following the blackout on August 14, President Bush and Prime Minister Chretien established a Joint US-Canada Task Force to investigate the cause of the blackout, discover why it spread to such a large area, and determine ways to prevent any recurrence. Secretary Abraham and Canadian Minister of Natural Resources Herb Dhaliwal serve as Co-Chairs of that Task Force.

In addition to Secretary Abraham, the U.S. members of the Task Force are Tom Ridge, Secretary of Homeland Security; Pat Wood, Chairman of the Federal Energy Regulatory Commission; and Nils Diaz, Chairman of the Nuclear Regulatory Commission. In addition to Minister Dhaliwal, the Canadian members are Deputy Prime Minister John Manley; Kenneth Vollman, Chairman of the National Energy Board; and Linda J. Keen, President and CEO of the Canadian Nuclear Safety Commission.

The Task Force has an enormous job. From the first day, they’ve been in the field collecting and verifying vast amounts of detailed data from power generating plants, control facilities, utilities, and grid operators. In essence, they are busy gathering and analyzing information on tens of thousands of individual events that occurred over 34,000 miles of voltage transmission lines and involved hundreds of power generating units and thousands of substations, switching facilities, and circuit protection devices. The teams have been interviewing and collecting records on the numerous people, policies, and procedures that play a part in our complex power infrastructure.

The investigation is being conducted through three separate yet coordinated working groups focused on the Electric System, Nuclear Power, and Security.

The Electric System Working Group, led by experts at the Energy Department and the Federal Energy Regulatory Commission along with Natural Resources Canada, is focusing on the transmission infrastructure, its management, and its functioning.

The Nuclear Power Working Group, managed by the Nuclear Regulatory Commission and the Canadian Nuclear Safety Commission, is examining the performance of nuclear plants in the affected area during the blackout.

The Security Working Group, which is managed by the Department of Homeland Security and the Canadian government’s Privy Council Office, is assessing the security aspects of the incident, including cyber security.

The good news is that these groups are making real headway. On September 12, the Task Force released a detailed timeline of events that led up to the blackout. This timeline is an essential tool for reconstructing the events of August 14 so that we can successfully understand exactly what caused the blackout.

The Electric System Working Group’s assignment is challenging due to the sheer size and complexity of interrelationships among the diverse components of the electricity infrastructure. Recognizing the scope of this challenge, the Electric Systems Group has enlisted additional expert assistance. Technical experts with the Independent System Operators in the affected regions and with NERC are working with members of this group to determine how all the events are interrelated. They are also examining the procedures and control mechanisms that were designed to prevent a blackout from spreading from one area to another.

The Consortium for Electric Reliability Technology Solutions (CERTS), which has broad expertise in transmission and power delivery issues, is also assisting with Working Group. This team includes some of the world’s top authorities on power system dynamics, transmission engineering and reliability, grid configuration, wholesale power markets, and outage recovery.

This group led the study of the 1996 blackout in the West and also helped DOE produce the comprehensive National Transmission Grid Study that recommended grid upgrades to meet transmission demands in the 21st century. Transmission experts from the Bonneville Power Administration are also providing technical assistance.

The Security Working Group includes members from DHS, DOE, the National Security Agency, the United States Secret Service, the Federal Bureau of Investigation, and NERC. This group is examining whether a physical or cyber security breach contributed to the cause of the blackout.

The Security Working Group is working with the other Task Force Working Groups; developing an inquiry plan that articulates a detailed timeline for review of data including forensics, and interviews of company representatives to better understand each company’s cyber topology; and working to obtain the detailed supporting data that will allow the team to better understand what caused, did not cause, or may have contributed to the events of August 14.

In summary, our vast energy infrastructure is built, managed, operated, regulated, and overseen by a large number of entities. Coordination among these stakeholders is essential to help prevent energy outages and ensure quick response and recovery if one occurs. The Department of Energy’s planning and coordination efforts prior to the August 2003 blackout laid the groundwork for success coordination after the blackout occurred. The blackout timeline released by the Joint US-Canada Task Force will allow the working groups to move forward in uncovering the root causes of the blackout. We are putting the puzzle together and proceeding as quickly as possible without sacrificing accuracy.

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